Monday, November 1, 2010

AIA-C1 Worth Investing ??


Type of Structure Warrants : Call Warrants


Description : NON-COLLATERALISED CASH SETTLED EUROPEAN-STYLE CALL WARRANTS
Underlying Stock : AIA GROUP LIMITED

Issuer : OSK INVESTMENT BANK BERHAD

Stock Code : 0553C1

Stock Short Name : AIA-C1

ISIN Code : MYJ0553C1L67

Board : Structured Warrants

Sector : STRUCTURED WARRANTS OTHERS

Initial Listing Information

Listing Date : 29/10/2010

Term Sheet Date : 28/10/2010

Issue Date : 28/10/2010

Issue/ Ask Price : MYR 0.1500

Issue Size Indicator : Unit

Issue Size in Unit : 90,000,000

Maturity Date : 27/06/2011

Exercise/Strike/Conversion Price : HKD 18.0000

Revised Exercise/Strike/Conversion Price : MYR 0.0000

Exercise/ Conversion Ratio : 6:1

Revised Exercise/ Conversion Ratio :

Settlement Type/ Convertible into : Cash

 
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Lets work out whether it is in the money or out of money by leveraging on AIA-C1 :-
 
Conversion Rate = 1HKD : 0.399RM
 
A) Current Share Price of AIA GROUP LIMIT = HKD 23.00
 
B) Call Warrant Price = RM 0.42 (Convert to HKD = 0.42/0.399 = 1.05)
 
IN the Money/OUT of Money = ((23 - 18)/6) - 1.05 = -0.22HKD (Convert to MYR = -0.22 * 0.399 = -0.088)
 
Overvalue % = 0.088/0.42 * 100 = 20.9% (To me anything more than 10% is high)
 
If AIA stay at HKD 23.00, then it is only worth taking in AIA-C1 at (0.42 - 0.088 = RM0.33) or offer slightly 10% more of RM0.36.
 
You work out the range according to the underlying stock of AIA's price, then you should know where you heading to. Till then happy investing.

2 comments:

Freak said...

Horse,

What's your opinion on MPHB? Do you mind to share your latest portfolio? Thanks in advance.

horse said...

hi freak,

just briefly gone through MPHB past results. earnings seem stable through out past years. hopefully dividend payout remain sustainable abt 70%. gearing medium toward high side abt 0.6 (end 2009). PE should stay around 8.96. i don't see any unhealthy figures beside the gearing. for investment and cum dividend think should be fined.

will update my portfolio in my next post.

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